Pay-to-play déjà vu; new governor. same scandal

A news story is not the same as a criminal investigation, and a criminal investigation is not the same as a conviction. However, the pay-to-play allegations involving state investments leveled against Gov. Susana Martinez last week in a report by the International Business Times are certainly ironic at least.

In 2008, then-Gov. Bill Richardson was set to be named commerce secretary by newly elected President Barack Obama. Richardson had run for president himself, and was an early supporter of Obama after dropping out, prompting Clinton loyalist James Carville to compare him to Judas.

Richardson was to be rewarded with a plumb cabinet-level post, when it was all scuttled by a federal investigation into pay-to-play allegations involving state investments.

The feds declined to prosecute Richardson, but the investigation exposed a web of corruption in which state investment funds were directed to political donors. As the IBT story points out, the New Mexico scandal led to changes in federal ethics laws in 2010 to prevent Wall Street executives from using campaign contributions to influence government investments.

Martinez didn’t have much of a political resume when she ran for governor in 2010. But, as a former prosecutor, voters assumed she was honest. And, Martinez devoted her campaign to tying Diane Denish, her opponent, to Richardson and implying both were not honest.

The governor now stands accused, in print, of doing the same things Richardson did.

According to the IBT report, eight financial firms have collectively given more than $1.2 million in political donations to Martinez and political groups that support her. The state has committed at least $757 million to those eight firms.

The state has shifted funds into higher-risk investments under Gov. Martinez, with below-average results, the report alleges. The SIC has seen a 7.7 percent average annual return, while the average for the S&P 500 for the same time period was nearly double that at 14.6 percent, the IBT story reports.

And, it should also be noted that while the federal government reformed its ethics laws after the 2010 scandal, Martinez has been more reluctant to change state laws. She called for investment reform in her State of the State address, but one year later she vetoed a bill that would have removed the governor as head of the State Investment Council.

State Rep. Bill McCamley has written to Attorney General Hector Balderas requesting an investigation into any possible violations of the Government Conduct Act, state disclosure laws, campaign reporting laws or federal SEC regulations.

McCamley also notes in his letter that the governor has attempted to impose a code of secrecy on the SIC. She is attempting to require all members to pledge not to disclose any discussions from closed-door meetings, and to effectively unseat those members who don’t agree.

What is happening behind closed doors that she is so eager to keep us from finding out about?

As the FBI investigation into Richardson showed, the bar for criminal charges in these cases is incredibly high, even when the evidence of corruption would seem to be apparent. But, the allegations do need to be thoroughly investigated.

We paid $130 million in fees and another $52 million in performance-related payments to investment managers in the last fiscal year, at the same time that schools and universities were taking another budget cut to make up for a chronic revenue shortage. In return for that money, we got results half as good as the S&P 500.

I don’t know if that’s a crime, but it is obscene.

Walter Rubel is editorial page editor of the Sun-News. He can be reached at wrubel@lcsun-news.com or follow @WalterRubel on Twitter.